Which economic measure does not account for income from abroad?

Achieve success on the FINRA Series 86 Exam. Utilize flashcards and multiple choice questions, each offering hints and explanations. Prepare effectively for your test!

Gross Domestic Product (GDP) is the correct answer because it specifically measures the total economic output produced within a country's borders, regardless of whether the income is generated by domestic or foreign entities. In contrast, Gross National Product (GNP) accounts for income earned by residents from investments abroad and excludes income earned by foreign residents from domestic investments.

The distinction lies in the focus of these measures: GDP emphasizes location while GNP emphasizes ownership. As such, GDP does not include the income that residents earn from outside the country, making it the appropriate choice for the question.

To provide some context about why other options do not fit, Gross National Product (GNP) explicitly considers the income from abroad, making it not suitable for this question. Net National Product (NNP) also encompasses income from foreign investments but adjusts for depreciation, thus also not matching the criteria. Personal Income (PI) refers to the income received by individuals in a given period, including wages, dividends, and other forms of income, but it too does not focus on where the income is generated in relation to the country's borders, thus not fitting the criterion perfectly in this context.

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